▶ Watch Video: Small businesses post-pandemic struggle to survive due to inflation
After two years of pandemic challenges, Erica Gutierrez’s Mexican heritage shop in Pasadena, California, is still just hanging on. Gutierrez’s has not taken a paycheck, and is surviving off savings and the help of her family.
During the pandemic, the city gave her a $10,000 grant, but she has since used all the funds. Now, her business is struggling with inflation.
“We have to pay more for products. We have to pay a lot more for shipping,” Gutierrez told CBS News’ Carter Evans.
She said she worries every day that her business will close, despite hopes of hiring a second employee. She now fears she may have to get a second job.
“That’s a very real thing because I have to figure out how to bring income to my home,” she said.
Nationally, 85% of small businesses experienced financial challenges in the last year, according to the Small Business Credit Survey. The National Federation of Independent Business Optimism Index found that optimism among small business owners is at its lowest level in nearly 50 years.
Pasadena Chamber of Commerce President Paul Little said the city has lost about 15% of its businesses since the pandemic began.
“The pandemic hammered everybody. We all got to a point where we thought, ‘Well, at least we can get back to some measure of a normal.’ But it’s even more challenging now,” he said. “Inflation has really presented another challenge to businesses.”
Treasury Secretary Janet Yellen told CNN on Tuesday that she was wrong when she said last year that inflation only posed a small risk and wasn’t likely to be a problem.
President Joe Biden met with Yellen and Federal Reserve Chairman Jerome Powell on Tuesday to discuss plans to lower inflation. Biden said that is his “top economic priority.”